This week’s data is likely to reinforce the ECB’s reluctance to cut interest rates in the near term, due to inflation rising to a new record high of 3.5%. It now seems the ECB is very unlikely to cut rates anytime this quarter.

Although, the euro has weakened versus most of the major currencies after a European Union report showed retail sales declined 0.5 percent in February, pointing to a slowdown in the region and adding to pressure for interest-rate cuts at some point this year.

Some Euro-zone data was weaker than expected with a 0.5% dip in German factory orders, although annually it still remains healthy. The ECB’s president Trichet is maintaining a tough stance on not cutting interest rates anytime soon.

The FX Market is in anticipation with both the BOE and ECB meeting on Thursday to discuss the current interest rates. Most analysts are expecting the BOE to cut their rates to 4.5% by the close of the year leaving the door open for more euro growth.